Hand therapy focuses on one of the most complex parts of the human anatomy, making it a highly specialized discipline requiring continuing education, and, often, advanced certification. But despite high demand for these unique practitioners, the field is not immune to the burden of declining reimbursements.

In 1998, Congress enacted a Medicare formula for reimbursement to physicians and other professionals known as the Sustainable Growth Rate. It set a target rate for reimbursement of goods and services, but was created during a time when medical payments were relatively flat. As spending grew, SGR reimbursements fell behind the cost of services rendered, so Congress began delaying cuts in Medicare payments to prevent further shortfalls in reimbursement relative to cost. That process has continued every year since 2002.

Threats

This year, the cuts could go into effect unless Congress acts to delay them again. Tim Mullen, OTR/L, CHT, PhD, legislative committee chairman for the American Society of Hand Therapists, said such a cut would have a stultifying effect on his profession. Mullen, who also is director of Orthopedic Associates of Michigan, said the society is urging its members to support legislation eliminating or modifying SGR.

Unfortunately, “all the oxygen is being consumed by the debt ceiling issue,” said Chuck Willmarth, director of state affairs and reimbursement and regulatory policy for the American Occupational Therapy Association. Without congressional action, a 29.5% reduction in Medicare payments will go into effect Jan. 1, 2012.

Those potential cuts aren’t the only threat to therapists’ livelihoods. Last year, the Centers for Medicare & Medicaid Services implemented a policy called the Multiple Procedure Payment Reduction, designed to reduce redundancies in payments to providers. Under MPPR, CMS will pay the full value of the highest code billed for a particular day, but reduces the reimbursement amount for subsequent procedures done that day.

Willmarth pointed out those redundancies already have been accounted for by the process by which the codes are valued. In addition, the reductions cut across disciplines, and would remain in effect even if subsequent therapies are performed by different categories of professionals on a single day, or even in different facilities, Mullen said.

“They didn’t even separate it by profession,” he said. “Let’s say someone has a physical therapy treatment because he’s been in an auto accident. Later that day, he drives across town to see a hand therapist for a cut tendon. Because PT did the initial evaluation, our charges are being cut right out of the gate. It’s an arbitrary way to address cost reduction.”

And then there’s the matter of the therapy cap. In 1997, the Balanced Budget Act imposed a $1,500 cap on outpatient services, except those provided by hospitals. But it soon became apparent some allowance was necessary for those Medicare patients who needed more extensive services, and several legal challenges led to a moratorium on the cap. In 2006, an exemptions process was applied, and has been ongoing ever since.

“There has been a cap for many, many years,” Willmarth said. “But the exceptions process allows you to go beyond it as long as certain conditions are met. So the cap hasn’t effectively impacted access to care. Each year that the cap has threatened to go into place, we’ve advocated for its repeal or its replacement with a process by which additional services can be delivered.”

The problem, Willmarth noted, is extending the exemptions for another year will cost $900 million. “That’s a lot of money, and it’s a challenge because, obviously, money is tight in Washington these days,” he said.

“Our hope is to tie, as we’ve done in the past, the therapy cap exceptions process extension — or some other solution — to the legislation to address the SGR problem,” Willmarth said. “But right now, those aren’t the top priorities for Congress.” If no action is taken, the exceptions process will expire Dec. 31.

Realities

It might seem therapists who don’t see many Medicare patients would be exempt from worry, but that’s not the case, Mullen said. “MPPR seems to be spreading to third-party payors now as well,” he said. “The big insurance companies see what Medicare is doing and say, ‘Let’s do it too.’ That’s starting to become a bit of a challenge.”

Doris Mesch, OTR/L, CHT, CFCE, owner of Arizona Hand Therapy in Sedona and Cottonwood, falls into that category. Although her Medicare patients are relatively few, she’s getting increasingly squeezed by the higher deductibles many insurance companies are imposing on their policy holders. “Sometimes when you ask patients to make a payment against their deductible, they just walk out,” she said. “But if you let it slide, you end up eating it because much of the time you never get paid. Fortunately, I have a large patient population who pay their bills, so it balances out. But the economy has really had an adverse effect on people’s ability to pay.”

Mullen said all of the downward pressure on reimbursements could end up significantly harming some practices. “I think some of the smaller clinics, particularly, are going to have more of a challenge,” he said. “They may have to start doing some serious financial analysis, and perhaps making splints or providing certain products will no longer be possible.”

Mullen noted a neoprene wrist wrap used as a step-down after a cast removal, for example, used to be covered by Medicare, but that’s no longer the case. “We hope the patient will run down to a medical supply store and buy one because we can no longer get reimbursed for it,” he said. “Many hand therapists are changing their business models and how they run their practices. I certainly don’t practice the same way I did when I started. It’s all about self-preservation.”

But Willmarth said the scenario is not all doom and gloom, noting that hand therapists still have a very low unemployment rate and enviable job security. The best thing for them to do, he said, is stay abreast of legislation and help advocate for the profession. “We need to educate the powers that be on the unique contributions of our professions: why they’re valuable, and why skilled services need to be paid for at realistic rates.” •